Providing Life Insurance for Employees: Canal HR

A man holds up paper cutouts representing life insurance for employees

Many employers frequently offer life insurance for employees in their comprehensive benefits package. Life insurance is a valuable benefit for employers to provide since it protects their employees’ families from enduring financial hardships.

While it’s a common employee benefit to have, employers have the option to offer life insurance or not. If you’re unsure what life insurance is, how it is beneficial, and how to offer it, learn more about life insurance from the professionals at Canal HR. 

What is Life Insurance?

Life insurance is a contractual policy agreement between the policyholder and an insurance company. Policyholders will pay premium rates to insurance companies for their life insurance policy. In exchange, the insurance company will pay a lump-sum amount of money called a death benefit to the insured’s beneficiaries upon the insured’s passing. 

In terms of employer-provided life insurance, the policyholder will be the employer and the insured will be the employees. Employers have the option to pay some or all of the premiums for their employees, making life insurance for employees cost-efficient ways to increase benefits packages

Benefits of Life Insurance for Employees

Employers that choose to offer life insurance for their employees provide much more than just financial protection under unfortunate circumstances. Also known as “group-term” or “voluntary term” life insurance, life insurance is easy to administer for employers and allows employees to receive a tax break and is also convenient and inexpensive. 

Easy Administration

Voluntary term life insurance is simple to administer since it doesn’t generate many claims and don’t require constant monitoring. Your life insurance provider will give you the necessary documents to enroll your employees in a policy. 

Insurance companies make it hassle-free for employers to administer life insurance for their employees. However, processing life insurance claims will be undoubtedly stressful. Even though you have the proper tools to efficiently process the claims, it can be difficult to maintain the regular flow of your work while grieving an employee’s passing. 

Tax Break for Employees

When you provide life insurance, it’s tax-free for up to $50,000 in coverage for your employees. According to the IRS, there are no tax consequences if the total amount of your policy does not exceed $50,000. Your employees’ life insurance is considered tax-deductible if you pay some of the premiums for your workforce.


Instead of having your employees research and shop around for life insurance on their days off, alleviate the stress and work by providing life insurance for them. When you provide life insurance for employees, you save them time by having the necessary paperwork ready for them to choose the policy of their choice through a company you’re comfortable with and have negotiated terms with already. 

Employees will just have to select their beneficiaries and fill out a few forms in order to enroll in your company’s life insurance policy. Plus, employees can enroll in your provided life insurance policy even if they already have life insurance from another provider. 

Low Cost

Aside from already doing the research and price-negotiation for life insurance for employees, you reduce the enrollment cost for your employees, as well. When your employees choose to begin a life insurance policy through your company, there are no additional costs to enroll. 

Life insurance policies on the open market don’t have the same affordable premiums as voluntary term life insurance policies would have since the rates are negotiated on behalf of a wider pool of individuals. 

How to Offer Life Insurance for Employees with Canal HR

If you want to empower your workforce with the benefits listed above, you should offer life insurance for employees within your company. Providing life insurance is easy and convenient when you allow a professional employer organization like Canal HR to handle the responsibilities of choosing, administering, and managing life insurance. With the help of Canal HR, you can provide great premium rates for your employee’s life insurance. As a PEO, we have access to lower rates because of our group buying power. 

We partner with Transamerica Life Insurance Company to provide coverage for our clients’ employees. Our partnership with Transamerica allows us to offer employers the chance to provide their employees with versatile life insurance plans that have available spouse and child coverage as well. Once you decide to offer life insurance for employees, simply give our industry experts at Canal HR a call to request a quote for your new employee benefit offering. 

In order to implement a successful life insurance plan, remind your employees to update their designated beneficiaries and information on their policy yearly and comply with HIPAA regulations when providing proof of instability. 

To learn more about providing life insurance, contact our customer service professionals for more information today!

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